All posts tagged Gulf economies

The Gulf Cooperation Council countries are used to high level credit ratings. And it’s no surprise: together, they sit on about a third of the world’s proven oil reserves and about a fifth of its gas reserves. But the region’s energy surplus conceals a number of weaknesses in these countries’ economies, political systems and monetary policies, analysts at Standard & Poor’s say in a report today.

Abu Dhabi, Kuwait and Qatar are rated “AA” by S&P, while Saudi Arabia is rated “AA-minus,” but their ratings would probably be higher if they had better-developed institutions and more flexibility in their monetary policies, the S&P report says.

Institutional issues identified by S&P include the “quality of policy debate,” political inclusiveness as well as transparency in decision-making and data reliability–none of which the GCC countries have addressed in recent years despite unrest and political upheaval sweeping through other parts of the Middle East.

One big concern for Gulf countries is getting better visibility on the scale of foreign assets owned by their large sovereign wealth funds.